Cone photoreceptors are the primarily cell class lost in Age-Related Macular Degeneration. Therapies designed to replace lost cones will require a rich source of these unique cells. Consequently, there is a clear need to identify the molecular mechanisms required to direct more plentiful pluripotent cells types to a cone lineage. We have developed a unique approach to addressing this problem. Our results demonstrate that mouse embryonic stem cells, first converted to primitive ectoderm, can be directed to a cone cell fate in culture. In vitro cone formation requires simultaneous repression of BMP and activation of FGF signaling, respectively. During neural induction, these two signaling pathways regulate SMAD1/5/8 nuclear translocation (BMP) and degradation (FGF), which directs ectodermal cells to a neural fate. In this application, we outline experiments designed to identify how these signaling pathways and their downstream components generate cone photoreceptor fate, by regulating both canonical and non-canonical BMP signaling as well as FGF signaling. Our hypothesis is that modulation of SMAD1/5/8 stability is required for cone formation. Previous studies have clearly demonstrated the developmental stage at which rod progenitors are transplanted to the host retina is critical for successful differentiation and integration of the cells. Our preliminary data demonstrates cone specific proteins and genes of the phototransduction cascade are already expressed in our cells. Characterizing their molecular, morphological and physiological properties will help us to determine the relative age of these in vitro-generated cones. Our research fits well into the National Plan for Eye and Vision Research objectives (http://www.nei.nih.gov/strategicplanning/ np_strab.asp), which include determine(ing) how stem cells differentiate in the development of the visual system and how they can be used to understand the molecular logic of cell-type- specific identity in the visual system. This project will identify molecular mechanisms that contribute to cone cell generation and form the basis of future studies focusing on the ability of these cells to replace cones lost to retinal damage and degeneration.